Why You Might Be Interested In Bermaz Auto Berhad (KLSE:BAUTO) For Its Upcoming Dividend

It appears like Bermaz Auto Berhad (KLSE:BAUTO) is about to go ex-dividend within the subsequent three days. The ex-dividend date is one enterprise day earlier than an organization’s file date, which is the date on which the corporate determines which shareholders are entitled to obtain a dividend. The ex-dividend date is vital as a result of any transaction on a inventory must have been settled earlier than the file date as a way to be eligible for a dividend. That means, you’ll need to buy Bermaz Auto Berhad’s shares earlier than the thirteenth of October to obtain the dividend, which shall be paid on the 4th of November.

The corporate’s upcoming dividend is RM0.03 a share, following on from the final 12 months, when the corporate distributed a complete of RM0.11 per share to shareholders. Final yr’s whole dividend funds present that Bermaz Auto Berhad has a trailing yield of 5.8% on the present share worth of MYR1.94. We love seeing corporations pay a dividend, nevertheless it’s additionally vital to make certain that laying the golden eggs is not going to kill our golden goose! So we have to test whether or not the dividend funds are coated, and if earnings are rising.

See our latest analysis for Bermaz Auto Berhad

Dividends are usually paid from firm earnings. If an organization pays extra in dividends than it earned in revenue, then the dividend could possibly be unsustainable. Bermaz Auto Berhad paid out greater than half (52%) of its earnings final yr, which is a daily payout ratio for many corporations. But money movement is often extra vital than revenue for assessing dividend sustainability, so we must always at all times test if the corporate generated sufficient money to afford its dividend. The excellent news is it paid out simply 20% of its free money movement within the final yr.

It is encouraging to see that the dividend is roofed by each revenue and money movement. This typically suggests the dividend is sustainable, so long as earnings do not drop precipitously.

Click on here to see the company’s payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Rising?

Companies with sturdy development prospects often make one of the best dividend payers, as a result of it is simpler to develop dividends when earnings per share are enhancing. Buyers love dividends, so if earnings fall and the dividend is decreased, count on a inventory to be bought off closely on the similar time. Happily for readers, Bermaz Auto Berhad’s earnings per share have been rising at 10% a yr for the previous 5 years. Bermaz Auto Berhad has a mean payout ratio which suggests a stability between rising earnings and rewarding shareholders. Given the short charge of earnings per share development and present degree of payout, there could also be an opportunity of additional dividend will increase sooner or later.

Many traders will assess an organization’s dividend efficiency by evaluating how a lot the dividend funds have modified over time. Prior to now 9 years, Bermaz Auto Berhad has elevated its dividend at roughly 18% a yr on common. Each per-share earnings and dividends have each been rising quickly in latest instances, which is nice to see.

Ultimate Takeaway

Is Bermaz Auto Berhad price shopping for for its dividend? We like Bermaz Auto Berhad’s rising earnings per share and the truth that – whereas its payout ratio is round common – it paid out a decrease share of its money movement. General we expect that is a beautiful mixture and worthy of additional analysis.

In mild of that, whereas Bermaz Auto Berhad has an interesting dividend, it is price understanding the dangers concerned with this inventory. For instance – Bermaz Auto Berhad has 1 warning sign we expect you ought to be conscious of.

Usually, we would not advocate simply shopping for the primary dividend inventory you see. Here is a curated list of interesting stocks that are strong dividend payers.

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This text by Merely Wall St is common in nature. We offer commentary based mostly on historic information and analyst forecasts solely utilizing an unbiased methodology and our articles are usually not supposed to be monetary recommendation. It doesn’t represent a suggestion to purchase or promote any inventory, and doesn’t take account of your targets, or your monetary scenario. We goal to deliver you long-term centered evaluation pushed by basic information. Notice that our evaluation might not issue within the newest price-sensitive firm bulletins or qualitative materials. Merely Wall St has no place in any shares talked about.